Virupaksha Organics IPO

Virupaksha Organics Limited IPO Strengths

Extensive Product Portfolio Aligned with Industry Growth

Virupaksha Organics Limited boasts a comprehensive portfolio of 54 products, including 23 APIs and 31 intermediates, focusing on high-volume therapeutic areas like anti-histamines and analgesics. This diverse offering, including key products such as Fexofenadine $\text{HCl}$ and Tapentadol $\text{HCl}$, effectively positions the company to capitalize on strong industry tailwinds in the global and Indian pharmaceutical and API markets.

Diversified Global Customer Base and Enduring Relationships

The company has cultivated long-standing relationships with over 550 customers across more than 100 countries, including marquee multinational pharmaceutical firms. This diversified global base benefits from high customer retention, which is driven by the complex regulatory requirements for changing API suppliers. A significant portion of Virupaksha’s revenue is generated from customers with relationships spanning more than five years.

Robust Manufacturing and Advanced Research & Development (R&D)

Virupaksha Organics operates six manufacturing units equipped with 223 reactors, enabling large-scale commercial production and custom synthesis (CDMO). The facilities have secured multiple international regulatory approvals (e.g., USFDA, PMDA). The company’s R&D team, comprising 61 personnel, drives product development and process optimization, supported by advanced technologies like flow chemistry for enhanced efficiency.

Experienced and Qualified Leadership Team

The company is led by experienced promoters and a seasoned senior management team with extensive knowledge in the pharmaceutical sector. Key individuals, including the Managing Director and Whole-Time Directors, possess over two decades of industry experience. This expertise has been crucial in successfully scaling operations, building brand recognition, and fostering long-term customer relationships, providing a competitive edge.

More About Virupaksha Organics Limited

Virupaksha Organics Limited is a research and development–driven Indian pharmaceutical company engaged in the manufacture of active pharmaceutical ingredients (APIs), key starting materials (KSMs), and intermediates. With an operating revenue CAGR of 12.2% between FY 2023 and FY 2025, the company has outperformed many peers in the sector. Its growth is powered by robust R&D capabilities, stringent regulatory compliance, and global-quality manufacturing practices.

Product Portfolio and Market Presence

As of March 31, 2025, Virupaksha Organics offered 54 products, including 23 APIs and 31 intermediates. These products cater to diverse therapeutic areas such as:

• Anti-histamines, anti-fungals, and anti-diabetics

• Analgesics, anti-depressants, and anti-asthmatics

• Anti-tussives, anti-anginals, and anti-ulceratives

The company serves over 550 customers across more than 100 countries, including long-standing relationships with multinational pharmaceutical firms in the US, Europe, and Japan. It has filed 25 Drug Master Files (DMFs) globally, with 11 filed with the USFDA.

Manufacturing and Technological Edge

Virupaksha Organics operates six manufacturing units in Telangana and Karnataka, equipped with 223 reactors of 988 KL total capacity. The company employs advanced technologies like flow chemistry, VapourTech reactors, infrared spectroscopy, NMR, mass spectrometry, and x-ray diffraction to ensure product safety, purity, and consistency.

R&D and Quality Certifications

Its R&D unit in Telangana is led by a team of 61 professionals under Dr. Shankar Reddy, a pharmaceutical expert with over 28 years of experience. The company’s facilities have received certifications from USFDA, WHO-GMP, PMDA, and EU-GMP, along with ISO and EcoVadis Bronze sustainability ratings.

Strategic Acquisitions

In December 2024, Virupaksha Organics acquired Progenerics Pharma Private Limited, enhancing its formulation development capabilities. Later, in June 2025, it acquired a 55.37% stake in Oxygenta Pharmaceutical Limited, expanding production by an additional 280 KL.

Leadership and Vision

Led by Managing Director Chandra Mouliswar Reddy Gangavaram, who has over 24 years of industry experience, the management continues to drive organic and inorganic growth, strengthen global presence, and reinforce Virupaksha Organics’ position as a trusted pharmaceutical manufacturer.

Industry Outlook

The Indian active pharmaceutical ingredient (API) market is estimated at around USD 14.18 billion in 2025 and is projected to reach approximately USD 21.46 billion by 2030, reflecting a compound annual growth rate (CAGR) of about 8.3–8.5% over the period. Broadly, the Indian pharmaceutical sector is expected to expand from USD 50–58 billion in 2024 to about USD 130 billion by 2030.

Key Growth Drivers

• The government’s emphasis on self-reliance in APIs and KSMs through production-linked incentive (PLI) schemes and bulk-drug parks continues to drive expansion.

• Global supply-chain diversification: many Western pharmaceutical companies are reducing dependency on China and sourcing APIs from India, benefiting domestic manufacturers.

• Rising domestic demand for generic medicines and an increasing burden of chronic diseases have boosted the need for APIs in segments such as anti-diabetics, anti-fungals, and analgesics.

• Enhanced R&D investments and technological advancements in synthesis, flow chemistry, and green manufacturing are promoting efficiency and sustainability.

Product-Segment Spotlight: APIs, KSMs & Intermediates

Within the pharmaceutical industry, APIs remain the dominant growth segment, accounting for over 70% of India’s pharmaceutical manufacturing market. Merchant (contract or outsourced) API and intermediate manufacturing is expected to grow at nearly 9–10% CAGR through 2030, indicating robust outsourcing potential.

Intermediates and key starting materials (KSMs) are also gaining prominence as companies pursue vertical integration to secure raw material supply and strengthen profitability. India is gradually reducing dependence on imports, particularly from China, by expanding local production capacity and R&D.

Outlook & Strategic Implications

India’s API and intermediate manufacturing sector stands at a pivotal stage, supported by favourable government policies, rising global outsourcing, and increasing domestic pharmaceutical consumption. However, as competition intensifies, success will depend on regulatory compliance, cost efficiency, and value-added CDMO capabilities.

How Will Virupaksha Organics Limited Benefit

• Virupaksha Organics Limited is well positioned to capitalise on India’s growing API and intermediate market, projected to expand at an 8–10% CAGR.

• Its strong R&D focus and technologically advanced manufacturing enable efficient production of high-value APIs and KSMs that meet global regulatory standards.

• With six modern facilities and over 988 KL reactor capacity, the company can scale operations to meet increasing global outsourcing demand.

• The government’s PLI scheme and reduced import dependency align with Virupaksha’s domestic production strengths, improving cost competitiveness.

• Its diversified product portfolio across therapeutic segments such as anti-diabetics, anti-fungals, and anti-histamines ensures stable revenue streams amid rising healthcare needs.

• Expanding partnerships with multinational firms in the US, EU, and Japan enhance export potential.

• Strategic acquisitions like Progenerics Pharma and Oxygenta Pharmaceutical strengthen formulation and bulk manufacturing capacities, driving long-term growth and market resilience.

Peer Group Comparison

Name of the Company	Total Revenue (₹ in million)	Face Value (₹)	P/E	EPS (Basic)	EPS (Diluted)	RoNW (%)	NAV (₹ per share)
Virupakhsa Organics	8,117.09	10.00	[●]*	13.17	13.17	17.25	111.25
Peer Groups
Supriya Lifescience Limited	6,964.85	2.00	30.02	23.35	23.35	19.17	121.85
Alivus Life Sciences Limited	23,868.84	2.00	23.62	39.63	39.52	17.24	229.92
Divi’s Laboratories Limited	93,600.00	2.00	68.95	82.53	82.53	14.67	562.70
Laurus Labs Limited	55,539.60	2.00	125.41	6.65	6.64	8.19	81.13
Aarti Drugs Limited	23,870.30	10.00	25.61	18.35	18.35	12.33	149.32
Neuland Laboratories Limited	14,768.37	10.00	68.83	202.74	202.74	17.08	1,186.90

Key Strategies for Virupaksha Organics Limited

Product Portfolio Expansion and Commercialization

The company plans to expand its diverse API and intermediate product portfolio, focusing on high-growth therapeutic areas like anti-inflammatory and anti-diabetic segments. This includes transitioning 10 pipeline products to full-scale commercialization and leveraging the capabilities of Progenerics and Oxygenta to efficiently develop and launch complex, high-value molecules based on market demand.

Global Market Penetration and CDMO Growth

Virupaksha aims to increase its market presence in regulated territories, including the US, Europe, and Japan, by significantly enhancing its DMF filings (currently 25 across various markets). This strategy will broaden global reach, grow the customer base, and reinforce regulatory compliance. Furthermore, the company intends to expand its CDMO business to cater to new international markets.

Strategic Entry into Formulations Market

The strategy involves a foray into the formulations market, leveraging the recent acquisition of Progenerics, a research-based formulation development company. This forward integration will allow the company to offer complex dosage forms and comprehensive pharmaceutical solutions. Utilizing Progenerics’ expertise will also support customers in preparing regulatory dossiers and accelerating market entry.

Capacity Expansion and Business Scaling

To meet increasing demand from an expanded product portfolio and new markets, the company plans to substantially expand its existing manufacturing capacities at Units 1, 2, 4, and 5. By installing additional reactors without acquiring new land, Virupaksha will increase its total reactor volume. ₹ 3,600.00 million from net proceeds will fund this necessary capacity increase.

Integration of Recent Acquisitions for Synergy

The company is focused on integrating the operations of Progenerics and Oxygenta, which were acquired to drive inorganic growth. The goal is to maximize synergies across R&D, supply chain, and customer relations. Leveraging Oxygenta’s 280 KL manufacturing capacity and Progenerics’ formulation expertise will diversify offerings, optimize expenses, and enhance productivity.